Island Air cold death makes Hawaiian Airlines a monopoly

In Hawaii, Island Air had a stand in the business and visitors industry for 37 years and before closing down on November 10 had 13% of the Interisland Airline traffic with codeshare and frequent flyer program agreements on United Airlines.

The last Island Air CEO David Uchiyama was not an airline man. He used to be in charge of International Marketing for the Hawaii Tourism Authority already at times when HTA refused to mail posters and brochures to Brazil, Singapore or Russia because they weren’t source markets and Kauai did not want foreign-speaking visitors on their beaches.

Perhaps it’s a problem in the US job market when one person is unable to get the experience needed to lead an industry or a company properly, because there are too many different jobs in a short time period.

Mr. David Uchiyama had been the Chief Executive Officer and President of Hawaii Island Air, Inc. only since May 2, 2016. Mr. Uchiyama served as the Chief Commercial Officer of Hawaii Island Air, Inc. until May 2, 2016. Mr. Uchiyama served as Vice President of Sales and Marketing at The Gas Company, LLC from October 26, 2015, to January 27, 2016. Before he served as Marketing Director at Hawaii Tourism Authority since March 2007.

He served as Regional Director of Communications for Starwood Hotels & Resorts. He created a transportation division for Paradise Cruises and was an Operations Chief for Gray Line Hawaii. Mr. Uchiyama also served as Corporate Director of Marketing for Otaka Hotels and Resorts in Hawaii. 

On his Linkedin profile, he posted: David Uchiyama is involved in Hawaii’s tourism industry in a senior executive management position for over 37 years, now having the honor in leading Island Air who has kept to its roots in providing inter-island service the “Island Way”! Reinvigorating this inter-island carrier who’s humble beginnings in our islands continues to respond to need of our communities and travel partners it serves.”

There were tears and plenty of hugs at Daniel K. Inouye International Airport on November 10  as Island Air workers wrapped their last day on the job.

On the same day an Island Airlines customer service manager said in tears:  “It really shows the spirit of Hawaii and the spirit of aloha, and just having them, seeing them come from other airlines, showing their support, knowing that it doesn’t matter what airline we work for, it’s still Hawaii and we’re still one big family.”

Hawaiian Airlines managers went out and explained on the day when Island Air closed on how one could apply for a job at the only relevant interisland airline remaining-  Hawaiian Airlines.

Hawaiian Airlines is the real elephant in the room. They already had a share of more than 80% of all interisland flights when Island Air was operating. After Hawaiian Airlines survived Aloha Airlines years ago and kept growing, kept increasing ticket prices, and many insiders think helped to push the popular Superferry as the only ferry service between Hawaiian islands out of the market became the monopoly in the Hawaiian interisland air market today. Island Air gone means a big gain for Hawaiian Airlines. They are now able to dictate rates and policies in the essential Hawaiian Interisland Air market. Interisland air service is essential for the State of Hawaii since there is no other way of transport left between islands. It’s essential to keep commerce and links working and it’s essential for the travel and tourism market as well.

$200 airfares for a 30 minutes flight are not the exception anymore compared to $19.00 in the good old days when there was an active competition.

This situation is splitting up families, commerce and breaks up this U.S. island State. Local residents rates (Kamaaina Rates) are long forgotten.

The weakest in the fight of survival were 423 dedicated employees of the bankrupt airline. They were hit hardest at the end.

First came the airline’s abrupt shutdown on Nov. 10, in which all 423 employees lost their jobs within 24 hours’ notice. Then came the realizations, several weeks later, that their last 10 days of wages, expected group health insurance coverage and even access to their 401(k) retirement funds, have also vanished.

In addition, Island Air failed to pay Health Insurance premium for the last month of operation, over $192,000 total was left unpaid. And since all employees were terminated with bankruptcy, rendering Island Air nonexistent, no group health insurance rate remains.

All that makes them ineligible for COBRA coverage, which usually helps maintain group health coverage for up to 18 months after a job loss.

That blow was followed by news that employees 401(k) accounts were inaccessible, and nearly $36,000 intended for workers’ retirement accounts failed to make it in.

At one time, Island Air was owned by billionaire Larry Ellison, one of the world’s richest man in the United States. He later sold his controlling interest but remained an investor in the airline. For a billionaire, $192,000 in unpaid health premiums and $36,000 in limbo for 401(k)s are pocket change, for the 423 workers, it means a world of difference.

Island Air boss David Uchiyama has been out of sight and reaches and most likely is joining the unemployment airline professionals that worked for Island Air.

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